Real estate bad loans with Nigerian banks hit N226.62bn

The total Non-Performing Loans (NPL) recorded by banks for the real estate and construction sectors increased by 66.57 per cent, as the NPL rose to N226.62 billion in 2020 from N136.05 billion in the same period in 2019.

According to the National Bureau of Statistics (NBS) in its Selected Banking Sector Data: Sectoral Breakdown of Credit, ePayment Channels and Staff Strength report, loans in the real estate sector rose by 12.87 percent to N56.03 billion at the end of 2020 from N49.65 billion in December 2019.

NPLs in the construction sector surged by 97.44 percent to N170.59 billion in December last year from N86.4 billion in 2019. The construction sector contracted by -7.68 percent last year, compared to a growth of 1.81 percent in 2019 and 2.33 percent in 2018.

The real state sector shrank by -9.22 percent in 2020, compared to a contraction of -2.36 percent in 2019 and -4.74 percent in 2018.

Meanwhile, experts blamed the development on the challenges facing the real estate sector, especially with the COVID-19 pandemic, as they tasked the Federal Government to pay adequate attention to the sector.

The Managing Director, Infinity Trust Mortgage Bank Plc, Dr. Olabanjo Obaleye, explained that many companies affected by the pandemic had folded up, as housing subscribers were finding it difficult to service their mortgage payment.

He said, “There are two companies that have just collapsed due to the inability of their owners to get foreign exchange for the importation of raw materials.

“On the level of government support on COVID-19, there is nothing visible we have seen. We have read so many pronouncements on that from the government but we haven’t got any palliative in that respect. We have made proposals to the government through our relevant authority but there is a need for certain funds to be set aside for this.”

A real estate practitioner and also the Vice President, Lagos Chamber of Commerce and Industry, (LCCI) Gbenga Ismail, said:

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